KeyCorp (KEY) today reported a net loss from continuing operations of $236 million, or 69 cents per diluted share, for its second quarter, which was substantially worse than our estimates as well as the consensus.

This compares to a net loss of $488 million, or $1.09 per diluted share, in the prior quarter and $1.13 billion, or $2.71 per diluted share, in the prior-year quarter.

Results were hurt by cash and deemed preferred stock dividends of $164 million, or 28 cents per share (after-tax), paid in connection with TARP funds and additional common equity raised. The downside also resulted from a $313 million sequential increase in loan loss reserve to $2.5 billion (pre-tax), representing 3.53% of total loans and 114% of non-performing loans.

Tax-equivalent net interest income decreased 3.6% sequentially to $598 million. This decrease was a result of a 10 bps decrease in NIM to 2.67%.

Non-interest income for the quarter

...

On July 8, KeyCorp (KEY) announced the commencement of an offer to exchange its common shares for any and all Trust Preferred Securities of KeyCorp Capital V and KeyCorp Capital VI, and any and all Enhanced Trust Preferred Securities of KeyCorp Capital VIII, KeyCorp Capital IX and KeyCorp Capital X.

KeyCorp had recently said that with the successful closure of a previously announced exchange offer, the company believes that it has fulfilled the requirement under the Supervisory Capital Assessment Program or stress test - to generate $1.8 billion of tier 1 common equity capital.

Under terms of the offer, for each Trust Preferred Security of KeyCorp Capital V, KeyCorp Capital VI, KeyCorp Capital VIII, KeyCorp Capital IX and KeyCorp Capital X (the Capital Trusts) accepted, KeyCorp will issue a number of its common shares based on an exchange ratio which will be announced on August 3.

Further, for

...

KeyCorp's (KEY) 4Q08 loss from continuing operations came in at $1.13 per share, substantially worse than the estimates. Higher-than-expected losses resulted from goodwill impairment charge due to a reduction in fair value of net assets in its National Banking segment and a continuing rise in loan loss provisions.

However, the Community Banking segment continued to experience organic growth aided by the U.S.B. acquisition. Credit quality deteriorated significantly during the quarter. Though the company strengthened its balance sheet with the injection of fresh capital and has taken steps to reduce its exposure to the Commercial Real Estate (CRE) home builders segment, we anticipate higher losses in the CRE portfolio in the coming quarters in view of its sizeable exposure to risky markets.

As such, we are maintaining our Sell rating on the shares of KEY. Our 6-month target price of $5.35 share assumes that KEY will trade at 15.3 times our FY10

...

Highlights include D.R. Horton, Inc. (DHI), Standard Pacific Corp. (SPF), Weyerhaeuser Company (WY), Masco Corporation (MAS) and Fortune Brands, Inc. (FO).Let's just keep this simple mantra in mind right now when it comes to new housing data. More new housing starts and permits: Bad; more new housing sales: Good. That is not because I want to see more construction workers out of work -- I don't -- but because each new home built adds to the towering inventory of homes waiting to be sold, and continues to push housing prices lower.Housing prices will continue to fall in any case, until they reach their historical relationships with incomes and rents, but adding to excess supply sure does not help matters. With that in mind, the new home sales data from January was an unmitigated disaster.Nationwide, new home sales fell ...

KeyCorp (

We just got May existing home sales data from the National Association of Realtors. Here's what the numbers looked like ...* Sales climbed 2% to a seasonally adjusted annual rate of 4.99 million in May from 4.89 million in April. That was slightly better than the average forecast of 4.95 million home sales. Sales were down 15.9% from the year-earlier reading of 5.93 million.* By region, sales rose 4.6% in the Northeast, 5.5% in the Midwest, and 2% in the West. They fell 0.5% in the South. By property type, sales climbed 1.6% in the single-family market and 5.5% in the condo arena. * The supply of homes for sale dipped 1.4% to 4.49 million units in May from 4.55 million in April, but climbed from 4.378 million a year earlier. On a months supply at current sales pace basis, inventory dipped to 10.8 months from ...